Chicken industry faces price cuts amid surplus

US - U.S. chicken producers face a challenge: cut production or watch breast meat prices fall even further than the seven-year lows notched this week in the wholesale markets, analysts said.

Consumers have yet to see dramatically lower prices for chicken breasts at grocery stores because supermarkets often are slow to pass on wholesale price declines. But shoppers could enjoy lower prices eventually if production remains high.

"They are going to have to cut production at some point — more than what they have done. In an extreme case that could be closing a plant," said Paul Aho, an economist at Poultry Perspective, a poultry industry consulting firm.

The problem, according to Aho and others, is that there is too much meat, be it chicken, beef or pork.

Prices for chicken breasts, which are widely used at home and in fast-food restaurants, are extremely low.